The Key Intuition of a Z-Score Model Like Altman's Is

question 13

Multiple Choice

The key intuition of a Z-score model like Altman's is that:

• A) only publicly traded firms can be evaluated.
• B) one will be just as well off by guessing on default rates.
• C) all corporations will default at least once.
• D) financial profiles of bankrupt and non-bankrupt firms are very different one year before bankruptcy.
• E) privately traded firms have better financial information which are disclosed to lenders and need not rely on any efficient market notions.

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Definitions:

Technology

The application of scientific knowledge for practical purposes, especially in industry and in the design and use of machines and devices.

Class Voting

The pattern of voting behavior where individuals' choices at the polls are strongly influenced by their social class.

Decreased

The act or process of becoming smaller in size, quantity, or intensity; the opposite of increased.

Fluctuated

Varied or changed over time within a range or scale, often in an unpredictable manner.